That's right, I said it but it's not what you think. Your mind is the most important thing you should pay attention to when it's comes to running your business. No matter what mind set you have, it will directly affect your business whether this means a positive or negative outcome. Here are 6 goals to get your mind in shape to run your business effectively:
1. Begin with the end in mind
This is your vision! Why you started your business. What your business looks like. How this will make you feel and how it will help your family down the road. Take a paper and write this all down and make a list of how to get there. Set your 6 month goals and 1 year goals. This is a great one especially if you are a new business owner and just starting out! At the beginning is when we have the most excitement and "fuel" to get running. So having your plan in place is crucial to stay on course. Number them from most important tasks to least important and check them off as they get done. Every day though begins with your mind.
2. Expect the best
Don't let fear and doubt take over! This will stop us dead in our tracks if we let it. Your mind is a powerful thing and the negative thoughts that seep in will ruin us and our dreams faster than anything. The cure to this is ACTION. Keeping one foot in front of the other and moving forward works wonders. You will face those fears and end up finding that they weren't as big of a deal as we chalked it up to be. This also includes the negative words of others around us. There will always be "haters". The only thing that shuts them up is success!
3. Put your mind to work doing only what you can do
When you are first starting out, you may wear many hats in your business. As your business grows, you either need to delegate or delete as many tasks as you can. You don't need to spend your time deleting emails or running the front desk. That's not the best use of your time. There are many apps out now that use automation as one of their features to help and definitely worth looking into. Time is the only thing we can't get more of so make the most of it.
4. Stay in line
YOU are what is going to make your business successful so it's vital that you have a laser focus. There are way too many distractions these days. Your cell phone is the main source of them. Don't let it be in your sight when you are doing business tasks or with customers unless needed. It's amazing how fast something small will catch our attention. Being responsible and mature play a big part here. Keep your mind focused on having a productive day and deleting distractions. You will be so glad you did at the end of the day! Reaching your goals will not happen when you waste that valuable time you have on meaningless activities.
5. Working on you and your business
Be the best you! With technology changing rapidly, we have to always be learning. If you get stuck in your ways, you will be left in the dust. Our business is our living so we need to be shaping our minds constantly so we can be experts of our field. Learning never stops as we develop our businesses. This also means taking care of yourself and filling your mind with good things.
6. Having an attitude of gratitude
Have the mindset of serving others and being thankful! We truly are so blessed and have so much to be thankful for. Start your day with a smile on your face :) Even though it's hard sometimes, keep personal and business separate. People will notice if something is bothering you and you don't want that affecting the image of your company. Also, celebrate your wins no matter how small. Think back to where you were last year or even a couple months ago. You have come along way since then and that is something to be excited about. Every little win is one step closer to your goal.
So Remember: Check yourself before you wreck yourself!
According to Fundera.com, a whopping 82% of businesses fail due to cash flow problems! I know you don't want to be part of this group in the future. But what if your business is already heading in this direction? The big difference you can make right away is understanding your cash flow. What does this mean though?! Well, the statement of cash flows explains where your money came from and where it went in a certain time period. At the end of every month, I provide my clients with 3 financial statements. These include the balance sheet, income statement and the statement of cash flows. I have heard of other bookkeepers giving their clients just the balance sheet and income statement on a monthly or quarterly basis which is fine. I personally feel though that the statement of cash flows is what ties all the statements together and allows the business owner to see his/her finances in a full picture view. Here's why! The balance sheet answers what your equity(capital) is in your business for a selected time period. What was my profit? This is what the income statement explains. And finally adding your statement of cash flows into the mix brings it all home. When you see exactly where you are spending, you can cut in certain areas. If you are like many businesses where profit is higher in certain months of the year, you can plan ahead your expenses. When the slower months come and you aren't prepared, it can put your business at risk. Like I say often, you can only manage what you measure! Being proactive is the key to success. I recently read a question someone asked online which was, "As a business owner, what is stopping you from hiring a bookkeeper?" A man answered and said he has shoe boxes full of receipts and it takes him two whole days a year to get them organized so he can do his taxes. He said he would rather take this time and do it himself rather than pay a bookkeeper. My first thought was this business owner misses the point of what a bookkeeper can do for him and the value of what those services could bring to his business. Taking a proactive approach to your business' finances is where growth happens. The statement of cash flows looks closely at 3 main categories: the operating, investing and financing activities. Your operating activities include your day-to-day expenses. It also explains how much money was generated or used from our services and/or products. The investing operartions include buying equipment (fixed asset) for example that helps your business bring in more profit. Lastly, the financing activities involve taking out a loan to buy that equipment. We, as business owners, can temporarily hide behind profit but we can't hide behind poor cash flow. This statement let's us see what our financial situation is really like. Each month, I either Skype or have a phone conversation with my clients to discuss their financial statements. Having these statements aren't enough if you don't know what the numbers mean for your business. The statement of cash flows alone could answer the questions your business has to not become part of the 82% of businesses that go down. You're not just a business owner, but a parent, spouse or young person trying to make it on your own. Your business is your livelihood and means everything to you as it should. Why not use these tools available to make your business everything you want it to be!
Most businesses out there aren't a one man operation. It takes a team to have a well oiled machine. Everyone doing their part and coming together with the same goal in mind makes a successful business. Your team though doesn't all have to be "in house". Outsourcing some of the services is good for you. Let's go into why:
1. Time saver
If you are a small "mom and pop shop", you are running most of the business yourself which keeps you very busy. Your books will be the last thing on your list at the end of the month. If you are a medical office, your staff is busy with patients, billing, answering the phones and keeping the office organized and running smoothly. Having an outsourced bookkeeper allows your books to be focused on without the rush of time being squeezed in here or there.
2. One less employee on the payroll
Saving money is yet another benefit. Bookkeepers can assist with A/P and A/R along with keeping up with the books. Bookkeeping services ARE tax deductible and here at On Point Bookkeeping, there is only a monthly rate so there's no paying someone by the hour!
3. Up-to-date Records
It's very common to see businesses with books that need "clean-up". Thinking it's something I'll do later is not something you want to make a habit. It maybe just not knowing how to classify and reconcile your accounts. If you get too far behind, the fees for historical cleanup get very costly. Also, if you want or need to get a business loan, the bank will need to see up-to-date financial statements. Tax time is the other obvious reason your books need to be tidy.
Even though you have someone in your office keeping your books up-to-date doesn't mean it's getting done correctly. Now this isn't against them or that they mean to do it. Giving your employee this duty if they aren't trained can make them feel overwhelmed or unsure in their confidence if the books are done right. Outsourcing your bookkeeping now allows that employee to do what he/she does best and focus more on the job they were hired for. Bookkeeping is more than reconciling your bank accounts, it's understanding what your numbers mean and how they are affecting your business in the future.
These are a few ways on how and why getting an outside bookkeeper helps your business. Maybe some of these hit home with you. I would love to help you and your business thrive more. Call or email me if you would like to get started or have any questions. Thank you :)
This is quickly becoming my quote! One sentence to explain it all. From the foundation of bookkeeping in general, measuring and keeping count of all the finances in your company is vital. Not only do you have to keep track of your books, but it's so beneficial at the same time. As with any successful relationship, good communication is the key. Your bookkeeper will need to know from time to time what a certain transaction is for in order to classify it correctly. He or she will need all receipts, invoices and bills sent over. The cloud based software I use makes this so easy by the way. In Xero, you can scan and send all of these things to an email address attached to your Xero account where you can upload them right into the accounting software. Another reason I love Xero! Just snap a pic of your receipt and send it straight from your phone. Now people ask why do I need to keep all receipts? Well, it's not so much that your bookkeeper needs as much as the IRS requires it. Unfortunately, a bank or credit card statement isn't enough.
Having a bookkeeper handling the books also provides "internal control", a safe guard to money being spent. An example being, you have your bookkeeper handle your Accounts Payable and pay bills from your business account. He/she is keeping track of what is owed and when and that there are no duplicate bills being paid out. The bill is entered in Xero and I as your bookkeeper doesn't post it but rather saves it to be approved by you. It's always better to have more than one person overseeing the money being spent.
Once you know what's in your accounts at the end of the month "the measuring", you can start "the managing". At this point, you can be more in control and pro-active rather than reactive. This allows you to plan for the future of your business by saving to grow your profits by reinvesting. This is your livelihood not only for you but for the employees you have. I provide you with monthly statements that tell you where your money came from and where it was spent in detail. Some business owners don't know what all their exact expenses go. It could surprise you of how much A/R you had outstanding or how much your COGS (Cost of Goods Sold) expenses are. Having a better idea of these numbers is where the fine tuning begins. Maybe you could cut your COGS down which would bring in more profit! This is why you started your business after all. To be successful making a living while doing something you enjoy and are good at. Bookkeeping may not be your passion though and some people don't know where to start. If you are in this boat, feel free to contact me so we can start measuring and managing your finances.
What is the difference between a bookkeeper and an accountant? Why do I need both? These are great questions and are frequently asked! I came across this blog and she does a great job of answering all of the above in depth. Here's the link to it:
So what is a chart of accounts? It's the listing of all accounts used by a business to record and classify financial transactions. Think of it as all the individual folders in a filing cabinet. When you record and classify, you are picking what appropriate file your transactions go into. Setting this up is one of the very first things you do when bookkeeping. Now the great thing about having a bookkeeper is that we do this for you behind the scenes! This is more of a backstage pass for those who do their own bookkeeping. Just like a table of contents in a book, you start out by having the main chapter groups: Assets, Liabilities, Equity, Revenue and Costs/Expenses. Anything that fall under your Assets group will start with 1000 so it gives you enough numbers to group transactions as needed. You want to be detailed but not overkill when classifying nor do you want to be too vague. All liabilities will be in the 2000 number series. Equity in the 3000, Revenue in the 4000 and Cost/Expenses in the 5000 and 6000 number series. Now assets are anything that you own, liabilities are what you owe and equity is what the difference from the assets and the liabilities (basically what is left over). Now for some examples:
1100 Accounts Receivable
1200 Prepaid Expenses
2100 Accounts Payable
2200 Sales Tax Payable
3000 Owner's Contribution
3100 Owner's Draw
5000 Cost of Goods Sold
Google also has some good templates you can download for your specific business type. Save it so you can change and edit as needed. Over time, it's a good to go in and delete the ones you don't use just to keep things clean :) One reason I like Xero for my bookkeeping software is that uploading my chart of accounts is easy and I can add to it on-the-go as I am in the middle of classifying a transaction. I love when technology assists us so wonderfully. I hope this helps as you begin your chart of accounts!
Just thinking about bookkeeping features isn't that all super exciting for the average person. You think numbers, calculating, receipts, filing and many more adjectives along that line. It's not until you know the detail that goes into all behind the scene and how these features benefit us as business owners. Picture an umbrella for a minute. There's not too much to it from the outsider's view. But long ago, (approximately 4,000 years ago) someone put a lot of thought into this design that was eventually called an umbrella. It was first designed to protect people from the sun and was later water proofed to shield us from rain. So whether on a hot, sunny day or a wet, rainy day, the umbrella is very useful. The benefits make the features attractive. I didn't say as a kid, "I dream of being a bookkeeper when I grow up" but now learning all that goes into balancing the books is interesting. The benefits of keeping the books correctly allows owners of companies to know where they are and plan where they want to go as a business. You can only manage what you can measure! Bookkeeping is the feature that gives you the benefit of knowledge and insight to one of the most important aspects of your business, your finances!